ASSIGNMENT AND SUBORDINATION OF MASTER LEASE
AND CONSENT OF MASTER TENANT

THIS
ASSIGNMENT AND SUBORDINATION OF MASTER LEASE AND CONSENT OF MASTER
TENANT (this " Agreement ") is made as of December 9,
2004, by and among 6267 CARPINTERIA AVENUE, LLC , a Delaware
limited liability company (" Owner "),
VENOCO, INC. , a Delaware corporation ("Master
Tenant"), and GERMAN AMERICAN CAPITAL CORPORATION , a
Maryland corporation (together with its successors and assigns, "
Lender ").

RECITALS:

A. WHEREAS,
Owner, by that certain Promissory Note, dated as of the date
hereof, and given by Owner in favor of Lender in the principal
amount of $10,000,000.00 (together with all extensions, renewals,
modifications, substitutions and amendments thereof, the "
Note "), is indebted to Lender for a loan advanced pursuant
to the Note (the indebtedness evidenced by the Note, together with
such interest accrued thereon, shall collectively be referred to as
the " Loan ");

B. WHEREAS,
the Loan is secured by, among other things, that certain Deed of
Trust, Assignment of Leases and Rents, Security Agreement and
Fixture Filing (together with all extensions, renewals,
modifications, substitutions and amendments thereof, the "
Security Instrument "), of even date herewith, which grants
Lender a first lien on the improved real property which is commonly
known as 6267 Carpinteria Avenue and which is located in the City
of Carpinteria, the County of Santa Barbara and the State of
California (the " Property ") (the Note, the Security
Instrument, this Agreement and any of the other documents
evidencing or securing the Loan, together with all extensions,
renewals, modifications, substitutions and amendments thereof, are
collectively referred to herein as the " Loan Documents
");

C. WHEREAS,
the Property is encumbered by that certain Building Lease, dated as
of November 7, 1996, by and between Bermant Development
Company (" BDC "), as master landlord, and Benton Oil and
Gas Company (" BOGC "), as master tenant, (a) as
assigned pursuant to that certain Assignment of Building Lease and
Development and Construction Agreement, dated as of June 19,
1997, from BDC, as assignor, in favor of Carpinteria Bluffs
Associates, LLC (" CBA "), as assignee (assigning the master
tenant's interest thereunder), (b) as amended by that certain
First Amendment to Building Lease, dated as of
May , 2000, by and between BOGC and
CBA, (c) as further assigned pursuant to that certain
Assignment and Assumption of Lease, dated as of December 28,
2001, from BOGC, as assignor, in favor of Venoco, Inc. ("
Master Tenant "), as assignee (assigning the master tenant's
interest thereunder), (d) as further assigned pursuant to that
certain Assignment and Assumption of Leases, dated as of
December 8, 2004, from CBA, as assignor, in favor of Owner, as
assignee (assigning, among other things, the master landlord's
interest thereunder), and (e) as further amended by that
certain Amendment to Lease, dated as of December 8, 2004,
between Grantor, as master landlord, and Master Tenant, as master
tenant (collectively, and as may be further modified, amended
and/or supplemented in accordance with the terms hereof and the
other Loan Documents, the " Master Lease "), a true and
correct copy of which is attached hereto as Exhibit A ;
and

D. WHEREAS,
Lender requires as a condition to the making of the Loan that
Owner, as the borrower under the Loan, assign the Master Lease to
Lender and subordinate the Master Lease to the Loan, and that
Master Tenant consent to the Loan and agree with Lender and Owner
as to certain matters more particularly described
herein.

AGREEMENT

NOW
THEREFORE, for good and valuable consideration the parties hereto
agree as follows:

1.
Assignment of Master Lease.
As additional collateral security for the
Loan, Owner hereby conditionally transfers, sets over and assigns
to Lender all of Owner's right, title and interest in and to the
Master Lease, said transfer and assignment to automatically become
a present, unconditional assignment, at Lender's option, upon the
occurrence of an Event of Default by Owner under the Note, the
Security Instrument or any of the other Loan Documents (which has
not been waived in writing by Lender).

2.
Master Tenant's Consent to
Assignment. Master Tenant hereby
acknowledges and agrees that (a) Master Tenant hereby consents
to the assignment of Owner's interest in the Master Lease by Owner
to Lender as additional security for the Loan, and
(b) notwithstanding anything to the contrary contained in the
Master Lease, (i) no such consent shall be required for the
assignment and transfer of the Master Lease to Lender or its
nominee following the occurrence of an Event of Default under the
Note or the Security Instrument or any of the other Loan Documents,
or in connection with a Foreclosure (hereinafter defined) and
(ii) Master Tenant shall not unreasonably withhold, condition
or delay its consent to the purchase by an entity other than Lender
(" Successor Owner ") at a sale by Lender or its nominee
subsequent to such Foreclosure. As used in this Agreement, the term
" Foreclosure " shall mean any exercise of the remedies
available to the Lender or other holder of the Security Instrument,
following the occurrence of a Default or Event of Default under the
Security Instrument, which results in a transfer of title to or
possession of the Property. The term "Foreclosure" shall include,
without limitation: (A) a transfer by judicial or non-judicial
foreclosure; (B) a transfer by deed in lieu of foreclosure;
(C) the appointment by a court of a receiver to assume
possession of the Property; (D) a transfer of either ownership
or control of the Owner, by exercise of a stock pledge or
otherwise; (E) a transfer resulting from an order given in a
bankruptcy, reorganization, insolvency or similar proceeding;
(F) if title to the Property is held by a tenant under a
ground lease, an assignment of the tenant's interest in such ground
lease; or (G) any similar judicial or non-judicial exercise of
the remedies held by the Lender or other holder of the Security
Instrument.

3.
Subordination of Master Lease:
Non-Disturbance.

(a) The
Master Lease as the same may hereafter be modified, amended,
supplemented and/or extended in accordance with the terms of this
Agreement, and all of Master Tenant's right, title and interest in
and to the Property, are and all rights and privileges of Master
Tenant to any management fee(s) paid thereunder are hereby and
shall at all times be subject and subordinate to the Security
Instrument and the lien thereof, to all the terms, conditions and
provisions of the Security Instrument and to each and every advance
made or hereafter made under the Security Instrument, and to all
renewals, modifications, supplements, consolidations, replacements,
substitutions and extensions of the Security Instrument, the Note
and the other Loan Documents and the rights, privileges, and powers
of Lender thereunder, so that at all times the Security Instrument
shall be and remain a lien on the Property prior and superior to
the Master Lease for all purposes.

(b) Lender
agrees that, if Lender exercises any of its rights under the Loan
Documents such that Lender (or a Successor Owner) becomes the owner
of the Property, including but not limited to an entry pursuant to
the Security Instrument, a foreclosure of the Security Instrument,
a power of sale under the Security Instrument or otherwise:
(a) the Master Lease shall continue in full force and effect
as a direct master lease between Lender (or such Successor Owner,
as applicable) and Master Tenant, and (b) Lender (or such
Successor Owner, as applicable) shall not disturb Master Tenant's
right of quiet possession of the premises demised under the Master
Lease so long as Master Tenant is not in default (subject to any
available notice requirements and/or grace periods) under any term,
covenant or condition of the Master Lease or this
Agreement.

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4.
Termination.
At such time as the Loan is paid in full
and the Security Instrument is released or assigned of record, this
Agreement and all of Lender's right, title and interest hereunder
with respect to the Master Lease shall terminate.

5.
Master Tenant Estoppel.
Master Tenant represents and warrants that
(a) the Master Lease is in full force and effect and has not
been modified, amended, supplemented and/or assigned by Master
Tenant other than pursuant to this Agreement, (b) Owner is not
in default under any of the terms, covenants or provisions of the
Master Lease and Master Tenant does not know of any event which,
but for the passage of time or the giving of notice or both, would
constitute an event of default by Owner under the Master Lease, and
(c) Master Tenant has not commenced any action or given or
received any notice for the purpose of terminating the Master Lease
prior to its expiration according to the terms of the Master
Lease.

6.
No Amendment to Master Lease.
Each of Owner and Master Tenant hereby
agrees that it shall not modify, amend, supplement and/or assign
the Master Lease without first obtaining the prior written consent
of Lender. In addition, Master Tenant hereby agrees that, at all
times following notification by Lender that an Event of Default has
occurred under the Note, the Security Instrument and/or the other
Loan Documents, Master Tenant shall not further sublet any portion
of the Property demised to it under the Master Lease, and that it
shall not modify, amend, supplement and/or permit the assignment of
any existing sublease without first obtaining the prior written
consent of Lender not to be unreasonably withheld or
delayed.

7.
Release from Liability.
In the event Lender exercises any rights
pursuant to this Agreement, Owner hereby releases Lender and Master
Tenant from any liability, costs, damages or other obligations of
Lender or Master Tenant to Owner as a result of such exercise of
rights except to the extent arising directly from Lender's gross
negligence or willful misconduct.

8.
Liability Continued.
If a Successor Owner shall succeed to the
interest of Owner under the Master Lease, in no event shall
Successor Owner have any liability under the Master Lease prior to
the date Successor Owner shall succeed to the interest of Owner
under the Master Tenant, nor any liability for claims, offsets or
defenses which Master Tenant might have had against Lender as Owner
under the Master Lease prior to the date Successor Owner shall
succeed to the interest of Owner under the Master Lease.

9.
Attornment by Master Tenant.
Owner and Master Tenant hereby agree that
upon notification by Lender that it wishes to succeed to the
interest of Owner due to the occurrence an Event of Default has
occurred under the Note, the Security Instrument and/or the other
Loan Documents, or following conveyance of title to the Property,
to the Successor Owner, Master Tenant shall attorn to the Successor
Owner and shall continue to perform all of Master Tenant's
obligations under the terms of the Master Lease with respect to the
Property in accordance with the terms of the Master
Lease.

10.
Notice and Opportunity to Cure.

(a) In
the event of a default by Owner in the performance or observance of
any of the terms and conditions of the Master Lease, Master Tenant
shall give a duplicate copy (herein referred to as the " First
Notice ") of any notice to be delivered to Owner pursuant to
the terms of the Master Lease to Lender in accordance with
Section 17 of this Agreement. In addition, in the event that
such default is not cured within the applicable cure period under
the terms of the Master Lease, and Master Tenant intends to
exercise its remedy of terminating the Master Lease, Master Tenant
shall send a second notice (the " Second Notice ") to
Lender, in accordance with Section 17 hereof, stating Master
Tenant's intention to terminate the Master Lease. Unless otherwise
required by applicable law, Master Tenant shall forebear from
taking any action to terminate the Master Lease for a period of
thirty (30) days after the service of the First Notice, and
for an additional period of sixty (60) days after the service
of the Second Notice (if such Second Notice is required, as
set

3

forth above) for a monetary event of
default or a non-monetary default which is susceptible to being
cured by the Lender and for an additional period of two hundred
seventy (270) days after the service of the Second Notice for
an event of default of a non-monetary nature which is not
susceptible to being cured by the Lender.

(b) No
notice given by Master Tenant to Owner shall be effective as a
notice under the terms of the Master Lease unless the applicable
duplicate notice to Lender which is required under subsection
(a) of this Section 10 (either the First Notice or the
Second Notice, as the case may be) is given to Lender in accordance
with this Agreement. It is understood that any failure by Master
Tenant to give such a duplicate notice (either the First Notice or
the Second Notice, as the case may be) to Lender shall not be a
default by Master Tenant either under this Agreement or under the
Master Lease, but rather shall operate only to void the
effectiveness of any such notice by Master Tenant to Owner under
the terms of the Master Lease.

(c) Master
Tenant agrees to accept performance by Lender with the same force
and effect as if performed by Owner, in accordance with the
provisions and within the cure periods prescribed in the Master
Lease (except that Lender shall have such additional cure periods,
not available to Owner, as are set forth in subsection
(a) hereof).

11.
Lender's Right to Terminate.
Notwithstanding anything contained in the
Master Lease to the contrary, Lender, or Owner at Lender's
direction pursuant to the Loan Documents, shall have the right to
terminate the Master Lease upon, or at any time after,
(a) Master Tenant shall become insolvent or a debtor in a
bankruptcy proceeding, (b) an Event of Default shall have
occurred and be then continuing under the Note, the Security
Instrument and/or under the other Loan Documents, or (c) a
default has occurred and is continuing under the Master Lease, in
each case, by giving Master Lease thirty (30) days' prior
written notice of such termination, in which event Master Tenant
shall resign as Master Tenant of the Property effective upon the
end of such thirty (30)-day period. Master Tenant agrees not
to look to Lender for payment of any accrued but unpaid fees
relating to the Property.

12.
New Master Lease.
Master Tenant agrees that in the event that
the Lender forecloses on the Property pursuant to its rights and
remedies under the Loan Documents, upon completion of the
Foreclosure, Master Tenant shall, if requested by Lender, Lender's
nominee, or any Successor Owner, enter into a new master lease with
the Lender, Lender's nominee or any such Successor Owner on the
same terms and conditions of the then-existing Master
Lease.

13.
Assignment of Proceeds.
As further security for the Note, Owner has
executed and delivered to Lender an assignment of leases and rents
which is contained within the granting clause of the Security
Instrument, assigning to Lender, among other things, all of Owner's
right, title and interest in and to all of the revenues of the
Property. Master Tenant acknowledges disclosure of the aforesaid
assignment.

14.
Further Assurances.
Master Tenant further agrees to
(a) execute such affidavits and certificates as Lender shall
reasonably require to further evidence the agreements contained
herein, (b) on written request from Lender, furnish Lender
with copies of such information as Owner is entitled to under the
Master Lease, and (c) cooperate with Lender's representative
in any inspection of all or any portion of the Property. Master
Tenant hereby acknowledges that some, or all, permits, licenses and
authorizations necessary for the use, operation and maintenance of
the Property (the " Permits ") may be held by, or on behalf
of, the Master Tenant. By executing this Agreement, Master Tenant
(x) agrees that it is, or will be, holding or providing all
such Permits for the benefit of Owner and (v) hereby agrees
that as security for repayment of the Debt by Owner in accordance
with the Security Instrument, to the extent permitted by applicable
law, Master Tenant hereby grants to Lender a security interest in
and to the Permits. Moreover, Master Tenant hereby agrees that,
following the occurrence of an Event of Default, it will continue
to hold such Permits for the benefit of Lender. Master Tenant
agrees that upon termination of the Master Lease, Master Tenant
shall (to the extent

4

assignable and to the extent
permitted by law) assign to Owner or to the new Master Tenant all
of Master Tenant's interest in such Permits at Owner's or such new
Master Tenant's expense.

15.
Default. The
occurrence of any of the following shall constitute an "Event of
Default" hereunder:

(a) If
Owner or Master Tenant fails to make any payment due under this
Agreement within five days of the due date therefor.

(b) If
Owner or Master Tenant fails to perform any other term or condition
of this Agreement, and such failure can be cured but continues for
thirty (30) days after notice thereof from Lender to such
party; provided , that if such failure can be cured but,
despite reasonable diligence, not within such time, the time to
cure shall be extended up to an additional sixty (60) days if
such party has commenced and diligently pursues cure of the
default.

(d) Any
representation or warranty made by Owner or Master Tenant hereunder
shall have been false or misleading in any material
respect.

(e) If
the Master Lease is modified, amended, supplemented and/or assigned
without the prior written consent of Lender.

The occurrence of an "Event of
Default" hereunder shall also constitute an automatic "Event of
Default" under, and as defined in the Note, the Security Instrument
and the other Loan Documents, and the occurrence of an "Event of
Default" under and as defined in the Note, the Security Instrument,
and/or under any of the other Loan Documents shall constitute an
automatic Event of Default under this Agreement.

16.
Governing Law.
THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE
PROPERTY IS LOCATED AND APPLICABLE FEDERAL LAW.

17.
Notices. All
notices and other communications shall have been duly given and
shall be effective (a) when delivered, (b) when
transmitted via telecopy (or other facsimile device) to the number
set forth below, (c) the day following the day on which the
same has been delivered prepaid to a reputable national overnight
air courier service, (d) the third (3 rd ) Business
Day following the day on which the same is sent by certified or
registered mail, postage prepaid, or (e) the day a
communication sent by registered or certified mail, postage
prepaid, is not accepted, in each case to the respective party at
the address set forth below, or at such other address as such party
may specify by written notice to the other party hereto. No notice
of change of address shall be effective except upon actual receipt.
This Section 17 shall not be construed in any way to affect or
impair any waiver of notice or demand provided in any Loan Document
or to require giving of notice or demand to or upon any Person in
any situation or for any reason. In addition to the foregoing, the
Master Tenant, Lender and Owner may, from time to time, specify to
the other party additional notice parties by providing to the other
party written notice of the name, address, telephone number and
telecopy number of any such

5

additional notice party. Each
such additional notice party shall be entitled to receive and/or
give any notice required or permitted to be given under this
Agreement:

18.
No Oral Change.
This Agreement, and any provisions hereof,
may not be modified, amended, waived, extended, changed, discharged
or terminated orally or by any act or failure to act on the part of
Owner, Lender or Master Tenant, but only by an agreement in writing
signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is
sought.

19.
Successors and Assigns.
This Agreement shall be binding upon and
inure to the benefit of Master Tenant, Owner and Lender and their
respective successors and assigns forever. Moreover, the term
"Lender", for the purposes of this Agreement, shall be deemed to
include any nominee or designee appointed by Lender in connection
with any Foreclosure and any Successor Owner to whom Master Tenant
is required to attorn pursuant to Section 9 hereof.

20.
Inapplicable Provisions.
If any term, covenant or condition of this
Agreement is held to be invalid, illegal or unenforceable in any
respect, this Agreement shall be construed without such
provision.

21.
Headings, etc.
The headings and captions of various
paragraphs of this Agreement are for convenience of reference only
and are not to be construed as defining or limiting, in any way,
the scope or intent of the provisions hereof.

22.
Duplicate Originals, Counterparts.
This Agreement may be executed in any
number of duplicate originals and each duplicate original shall be
deemed to be an original. This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an
original instrument and all of which together shall constitute a
single Agreement. The failure of any party hereto to execute this
Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.

23.
Number and Gender.
Whenever the context may require, any
pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and
pronouns shall include the plural and vice versa.

24.
No Transfer.
Without the consent of Lender, Master
Tenant shall not, except as expressly permitted in the Master
Lease, sell, transfer, or assign any of Master Tenant's interest in
the Master Lease.

6

25.
Miscellaneous.
Wherever pursuant to this Agreement it is
provided that Owner shall pay any costs and expenses, such costs
and expenses shall include, but not be limited to, legal fees and
disbursements of Lender, whether retained fines, the reimbursement
for the expenses of in-house staff or otherwise.

26.
Survival of Agreement.
At such time as the Loan is paid in full
the Security Instrument is released or assigned of record, this
Agreement and all of Lender's right, title and interest hereunder
with respect to the Master Lease shall terminate. Notwithstanding
the foregoing, all provisions contained in this Agreement that
pertain to the relationship of the Master Tenant to the Lender or
the Lender's nominee in the event that the Lender or its nominee
have succeeded to the interests of the Owner as "Owner" under the
Master Lease, the terms of this Agreement shall survive until such
time as the Lender or its nominee is no longer the "Owner" under
the Master Lease.

[Signature Page Follows]

7

IN
WITNESS WHEREOF the undersigned have executed this Agreement and
Consent as of the date and year first written above.

OWNER:

6267 CARPINTERIA AVENUE, LLC,
a Delaware limited liability company

By:

Venoco, Inc.,
a Delaware corporation,
its Sole Member

By:

/s/ MICHAEL G.
EDWARDS

Name: Michael
G. Edwards
Title: Vice President

MASTER TENANT:

VENOCO, INC.,
a Delaware corporation

By:

/s/ MICHAEL G.
EDWARDS

Name: Michael
G. Edwards
Title: Vice President

LENDER:

GERMAN AMERICAN CAPITAL CORPORATION,
a Maryland corporation

By:

/s/ SANDY
VERGANO

Name: Sandy
Vergano
Title: Vice President

By:

/s/ JMARTINI

Name: Joanne
Martini
Title: Authorized Signatory

STATE OF
CALIFORNIA

)

)

COUNTY OF SANTA
BARBARA

)

On
December 6, 2004, before me, Debra Lynn Hambleton, a Notary
Public in and for said State, personally appeared Michael G.
Edwards, personally known to me to be the person whose name is
subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his
signature on the instrument the person, or the entity upon behalf
of which the person acted, executed the instrument.

WITNESS
my hand and official seal.

/s/ DEBRA LYNN
HAMBLETON

Notary
Public

My Commission Expires: Mar. 7, 2008

[SEAL]

[NOTARIAL SEAL]

STATE OF
CALIFORNIA

)

)

COUNTY OF SANTA
BARBARA

)

On
December 6, 2004, before me, Debra Lynn Hambleton, a Notary
Public in and for said State, personally appeared Michael G.
Edwards, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name is subscribed
to the within instrument and acknowledged to me that he executed
the same in his authorized capacity, and that by his signature on
the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.

WITNESS
my hand and official seal.

/s/ DEBRA LYNN
HAMBLETON

Notary
Public

My Commission Expires: Mar. 7, 2008

[SEAL]

[NOTARIAL SEAL]

AMENDMENT
TO LEASE

This
AMENDMENT TO LEASE, dated as of December 8, 2004 (this "
Amendment "), is made by and among 6267 CARPINTERIA AVENUE,
LLC, a Delaware limited liability company (" Landlord "),
and VENOCO, INC., a Delaware corporation (" Tenant
").

R E C I T A L S:

A.

Bermant Development Company (as
predecessor in interest to Carpinteria Bluffs Associates, LLC ("
Seller "), as landlord, and Benton Oil and Gas Company (as
predecessor in interest to Tenant), as tenant, entered into that
certain Building Lease, dated November 7, 1996 (as heretofore
amended, supplemented or modified, the " Lease "), providing
for the lease of certain premises more particularly described in
the Lease (the " Premises ") and located at 6267 Carpinteria
Avenue, Carpinteria, CA (the " Property ").

B.

Pursuant to that certain Purchase
and Sale Agreement and Joint Escrow Instructions, dated as of
September 30, 2004 (the " Purchase Agreement "),
between Seller and Tenant, Seller has sold the Property to Landlord
(the wholly-owned subsidiary of Tenant), and Landlord purchased the
Property from Seller.

C.

In connection with the sale of the Property
pursuant to the Purchase Agreement, the parties hereto now desire
to make certain amendments to the Lease, all as provided for in
this Amendment.

NOW,
THEREFORE, for good and valuable consideration, the adequacy and
receipt of which is hereby acknowledged, the parties hereto agree
as follows:

A G R E E M E N T:

1.
DEFINED TERMS.
Capitalized terms used and not otherwise
defined herein shall have the meanings given such terms in the
Lease. As used in this Amendment, " Effective Date " means
December 8, 2004.

2.
AMENDMENTS.
As of the Effective Date, Landlord and
Tenant agree that the Lease is amended as follows:

(a)
Annual Rent.
Annual rent under the Lease (excluding any
additional rent due pursuant to Section 3.2 of the
Lease) shall be $1,070,055 ($89,171.25 per month; $21.00 per square
foot per year), subject to adjustment in accordance with the terms
and conditions of the Lease.

(b)
Definitions.Section 3.4(a) of the Lease is
hereby amended as follows:

(i) The
definition of "Building Operating Expenses" shall be amended to
include the following additional items:

(A) A
property management fee of up to four percent (4%) of effective
gross income derived from the Property by Landlord; and

(B) All
of Landlord's actual administrative and overhead
expenses.

(ii) The
following clause is deleted from the end of the first paragraph of
Section 3.4(a) : "and an amount equal to 12.5% of all
such expenses to cover the Lessor's administrative and overhead
expenses."

1

(c)
Rental Adjustment.Section 3.5 of the Lease is
hereby amended and restated in its entirety as follows:

"
3.5 Rent Adjustment. Beginning on the
fifth anniversary of the Rent Commencement Date and every
five (5) years thereafter during the term of the Lease, annual
rent shall be increased to an amount equal 110% of the annual rent
for the immediately preceding five year period."

(d)
Security Deposit.Section 4 of the Lease is
amended and restated in its entirety as follows:

"4.
SECURITY DEPOSIT

The
security deposit under the Lease shall be an amount equal to one
month's base rent."

(e)
Term.Section 5 of the Basic Lease Provisions is amended and
restated such that the term of the Lease shall continue for
fifteen (15) years after the Effective Date.

(f)
Rent Commencement Date and Termination
Date.Section 6 of the
Basic Lease Provisions is hereby amended such that the Rent
Commencement Date shall be December 13, 2004 and the
Termination Date shall be December 12, 2019.

(g)
Damage or Destruction.Section 8.3(b) of the Lease is
amended and restated as follows:

"(b)
If the Lessor is obligated to repair the Premises because the
repair can be completed within ninety (90) days or if the
Lessor elects to repair the Premises as provided above, but does
not commence such repair within one hundred twenty (120) days
after the date of the casualty or does not diligently pursue such
repair until completion, then, subject to any extension of up to
another sixty (60) days for delay beyond the reasonable
control of the Lessor, the Lessee may, at the Lessee's option,
terminate this Lease by giving the Lessor written notice of the
Lessee's election to terminate, in which event this Lease shall
terminate thirty (30) days thereafter. If the Lessor is
obligated to repair the Premises as a result of a Lessee's Notice
and the conditions above are satisfied, there shall be no
termination right on the part of the Lessee."

(h)
Permitted Subletting.Section 11.9 of the Lease
(which section was added to the Lease pursuant to that certain
First Amendment to Building Lease, dated as of
May , 2000) is hereby deleted in its
entirety.

(i)
References to Lease.
Upon the effectiveness of this Amendment,
references in the Lease to "this Lease" or "the Lease" and similar
references shall be deemed to be references to the Lease, as
amended by this Amendment.

3.
FURTHER ASSURANCES.
Each party hereto shall execute,
acknowledge and deliver to the other parties all documents, and
shall take all actions, reasonably required by such other parties
from time to time to confirm or effect the matters set forth
herein, or otherwise to carry out the purposes of this
Amendment.

4.
ATTORNEYS' FEES.
In the event that any litigation shall be
commenced concerning this Amendment by any party hereto, the party
prevailing in such litigation shall be entitled to recover, in
addition to such other relief as may be granted, its reasonable
costs and expenses, including, without limitation reasonable
attorneys' fees and court costs, whether or not taxable, as awarded
by a court of competent jurisdiction.

2

5.
NOTICES. All
notices, demands, approvals and other communications provided for
in this Amendment shall be in writing and be delivered to the
appropriate party at its address as follows:

Addresses
for notice may be changed, from time to time, by written notice to
all other parties. All communications shall be effective when
actually received; provided, however , that non-receipt of
any communication as the result of a change of address of which the
sending party was not notified or as the result of a refusal to
accept delivery shall be deemed receipt of such
communication.

6.
NO OTHER PARTIES BENEFITED.
This Amendment is made for the purpose of
setting forth certain rights and obligations of Landlord and
Tenant, and no other person shall have any rights hereunder or by
reason hereof as a third party beneficiary or otherwise.

7.
MISCELLANEOUS.
This Amendment shall bind, and shall inure
to the benefit of, the successors and assigns of the parties
hereto. Except as expressly modified herein, the Lease shall
continue in full force and effect without change. This Amendment
may be executed in counterparts with the same force and effect as
if the parties had executed one instrument, and each such
counterpart shall constitute an original hereof. No provision of
this Amendment that is held to be inoperative, unenforceable or
invalid shall affect the remaining provisions, and to this end all
provisions hereof are hereby declared to be severable. Time is of
the essence of this Amendment. This Amendment shall be governed by
the laws of the State of California.

[Remainder of page intentionally left
blank.]

3

IN
WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.

THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this "
Assignment ") is made and entered info as of
December 8, 2004 (" Effective Date "), by and among
CARPINTERIA BLUFFS ASSOCIATES, LLC, a California limited liability
company (" Assignor ") and 6267 CARPINTERIA AVENUE, LLC, a
Delaware limited liability company (" Assignee "), with
reference to the following facts:

RECITALS

A.

Pursuant to that certain Purchase
and Sale Agreement and Joint Escrow Instructions dated
September 30, 2004 (" Purchase Agreement ") between
Assignor and Assignee, Assignor agreed to sell to Assignee, and
Assignee agreed to purchase from Assignor, certain real property
located in the City of Carpinteria, County of Santa Barbara, State
of California, and more particularly described in
Exhibit A attached hereto (the " Property "),
upon the terms and subject to the conditions set forth in the
Purchase Agreement.

Pursuant to the Purchase Agreement, the parties
are obligated to enter this Assignment.

NOW, THEREFORE , the parties to this Assignment, intending
to be legally bound, do hereby covenant and agree as
follows:

1.
Assignment of Leases.
Effective as of the Effective Date,
Assignor transfers and assigns to Assignee all of Assignor's right,
title and interest and all of Assignor's duties and obligations as
the Landlord under the Leases that arise or accrue after the
Effective Date.

2.
Acceptance of Assignment.
Effective as the Effective Date, Assignee
accepts the assignment of all of Assignor's right, title and
interest and assumes all of Assignor's duties and obligations as
the Landlord under the Leases arising or accruing after the
Effective Date.

3.
Indemnification.

3.1
Indemnification by Assignor.
Assignor shall defend, indemnify, protect
and hold harmless Assignee and its members, managers, officers,
directors, employees, agents, representatives, affiliates,
successors and assigns, from and against any and all demands,
claims, actions, causes of action, damages, losses, fines,
penalties, liabilities, obligations, costs and expenses, including,
without limitation, attorneys' fees, arising out of, resulting from
or relating to any act, event or occurrence relating to the Leases
that accrued or arose prior to the Effective Date, including,
without limitation, Assignor's performance or failure to perform
any obligation, covenant, or condition under any of the
Leases.

and
against any and all demands, claims, actions, causes of action,
damages, losses, fines, penalties, liabilities, obligations, costs
and expenses, including, without limitation, attorneys' fees,
arising out of, resulting from or relating to any act, event or
occurrence relating to the Leases that accrues or arises after the
Effective Date, including, without limitation, Assignee's
performance or failure to perform any obligation, covenant, or
condition under any of the Leases.

4.
Attorneys' Fees.
In the event of any action or proceeding to
enforce or construe any of the provisions of this Assignment, the
prevailing party in any such action or proceeding shall be entitled
to reasonable attorneys' fees and costs, whether or not such action
or proceeding proceeds to final judgment.

5.
Further Assurances.
Each of the parties shall, from time to
time at the request of the other party, execute and deliver such
other instruments and documents and shall take such other actions
as may be required to consummate the transaction contemplated by
this Assignment and/or carry out the purposes and terms of this
Assignment.

6.
Governing Law.
This Assignment shall be construed,
interpreted and applied in accordance with the laws of the State of
California.

7.
Counterparts.
This Assignment may be executed in any
number of counterparts, each of which shall be an original, but all
of which shall constitute one and the same instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

2

IN WITNESS WHEREOF , the parties hereto have executed this
Assignment as of the date first set forth above.

On
December 7, 2004, before me, Elaine M. Georges, Notary Public,
personally appeared Jeffrey C. Bermant, personally known to me OR
proved to me on the basis of satisfactory evidence to be the person
whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the
instrument.

Witness my hand and official
seal.
[NOTARY SEAL]

ELAINE M.
GEORGES

(SIGNATURE OF
NOTARY)

4

STATE OF CALIFORNIA

)

)

COUNTY OF SANTA
BARBARA

)

On
December 3, 2004, before me, Debra Lynn Hambleton, a Notary
Public in and for said State, personally appear Timothy Marquez,
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name is subscribed
to the within instrument and acknowledged to me that he executed
the same in his authorized capacity, and that by his signature on
the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.

WITNESS
my hand and official seal.

/s/ DEBRA LYNN
HAMBLETON

Notary
Public

My Commission Expires: Mar. 7, 2008

[SEAL]

[NOTARIAL SEAL]

5

ASSIGNMENT
AND ASSUMPTION OF LEASE

THIS ASSIGNMENT AND ASSUMPTION OF LEASE (the "Assignment")
is between BENTON OIL AND GAS COMPANY , a Delaware
corporation (the "Assignor"), and VENOCO, INC. , a
Delaware corporation (the "Assignee") and is made with reference to
the following facts:

RECITALS:

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